CHANGE MANAGEMENTWe focus on the executive’s organizational abilitywhich is concerned with changes, when changeneeds to occur and review strategies formanaging the change process.THE FRAME WORK FOR CHANGEThe effective management of change involvesthree steps: a) Understanding the current state of the organization. b) Establishing the state in which the organization wants to be in the future. c) Moving the organization through a transition towards the foreseen state.
WHY IS CHANGE NECESSARY? Identifying the present condition and problem(s). Determining whether there is a need for change. Establishing change goals and the new state or condition after the change.
WHAT NEEDS TO BE CHANGED ? Examining the various elements of an organization and short-listing those which need to be changed in order to achieve the new state. Identifying the hurdles or impediments to change.
HOW SHOULD CHANGE OCCUR? Selecting a change strategy. Implementing the change strategy. Establishing systems and processes to maintain the new situation. Evaluating the change effort.
IDENTIFYING PROBLEMS ANDDETERMINING THE NEED FOR CHANGE The level and the need for change is determined by the extent of mismatch of internal competencies with that of external demands. Another reason for change could also be the estimated mismatch between internal and external factors in the future. Several pointers which help indicate a potential mismatch. A decline in financial indicators of effectiveness. A change in other indicators such as market share. Increased turnover of key personnel. Lowering of results on quality indices. Increased clients complaints. Increasing stress among employees. Decreasing morale among employees.
ESATABLISHING CHANGE GOALS AND THE NEW END STATE Defining explicitly what the organization should look like will serve as a descriptive guide for determining the change strategy to be adopted. Executives need to clearly identify the kind of organization they are trying to create, in as much detail as possible. Executives should specify the expected organizational structure, reward system, personnel policies, authority and task responsibility distributions, managerial styles and roles, performance review systems and performance outcomes.
WHAT NEEDS TO CHANGE?Identify points from where change can be initiated: The key components of the organization may be used as a starting point. These are six critical areas viz., key tasks and work process, individual competencies, technology, organizational structures, systems and culture. These points help to identify where to initiate change and highlight where change may evolve from internally. Change in one area will probably result in compensatory or retaliatory changes in another, as these components are interdependent.
TECHNICAL V. PEOPLE FACTORS: This aspect is important, it is often unclear whether changes in the way organizations work can be achieved by first changing the people or the technical factors. Most change programmes focus on changing individual attitudes, though at times the most effective way to change behaviour is to put people into a new organizational context, which imposes new rules, responsibilities and relationships.
DEPTH OF CHANGE REQUIRED Minor changes take place on a continuous basis in any organization. Organizations evolve as a result of relatively long periods of continuous and incremental change. This is known as ‘first order’ change. This level of change may have an impact on systems, structures or people to improve the effectiveness of the organization, but, at this depth, the change process, largely, leaves the underlying infrastructure and core patterns of behaviour and thinking intact. This change can be easily reversed. Due to major mismatches between internal capabilities and external factors, at times major fundamental reorganizations must occur which disturb the organizational equilibrium. Here, mere first-order changes are inappropriate: the need is to transform. Transformational change, or ‘second order change involves alteration of the system’s basic governing rules and is a multi- dimensional, multi-component and multi-level alteration that shifts the systems irreversibly to a new and revolutionary state.
LEVEL OF MANAGEMENT INVOLVED Change is often aimed at the lower or middle levels of the organization. Organization frequently get into trouble because the senior staff do not support the change strategy. The senior executives either need to be won over or worked around and this requires considerable skill on the part of the executive initiating change.
IMPEDIMENTS TO CHANGE Some of the impediments to change are: Major problems that had not been foreseen. Co-ordination of activities (for example, by task force, committees, supervisors) not effective enough. Competing activities distracted attention from the change effort. Insufficient skills / abilities of employees involved with the change. Inadequate training of and instruction to lower level employees. Uncontrollable factors in the external environment (e.g., competitive, economic, governmental control, laws) having an adverse affect.
APPROACH… COMMONLY USED ADVANTAGES DRAWBACKSEducation & Where there is a lack of Once persuaded, people will Can be very timeCommunication information or inaccurate often help with the consuming if many people information and analysis implementation of the change are involvedParticipation & Where the initiators do not have People who participate will be Can be very timeInvolvement all the information they need to committed and any relevant consuming if the design the change and where information they have will be participators design an others have considerable power integrated into the change inappropriate change and to resist plan may defeat the purpose of the whole processFacilitation & Where people are resisting This approach works best with Can be time – consuming,Support change because of adjustment adjustment problems expensive and still not be problems successfulNegotiation & Where someone or some group Sometimes it is a relatively Can be very expensive inAgreement will clearly lose out in a change, easy way to avoid major may cases if it alerts others and where that group has resistance to also negotiate for considerable power to resist complianceManipulation & Where other tactics will not It can be a relatively quick and Can lead to futureCo-opting work or are too expensive inexpensive solution problems if people feel manipulatedExplicit & Implicit Where speed is essential, and It is fast and can overcome Can be risky if it leavesCoercion the change initiators possess any kind of resistance people angry at the considerable power initiators
MINDSET- ‘UNFREEZING,CHANGING AND REFREEZING’: The ‘unfreezing’ process involves the individuals unlocking their current mental approach towards doing things. They need to be prepared to accept new ideas and behaviour, which is helped by adopting a more flexible mindset. A mindset, which is ‘unfrozen’, offers the possibility for new learning to take place. Finally, there is a process of ‘refreezing’ or consolidation. In other words, new patterns of behaviour and thinking must be supported by social cues and a reward systems both formal and informal, so they become more natural processes.
HOW SHOULD CHANGE OCCUR? SELECTING A CHANGE STRATEGY: Three areas in particular, need to be reviewed- the style, depth and method of change. STYLE: Different styles may need to be adopted for implementing different change strategies. Collaborative approaches and participative leadership are more effective styles. One of the major reasons why change interventions falter is because of a lack of two-way communication and a lack of participation and involvement.
DEPTH: It is necessary to establish if the change will be incremental or more transformational in nature. First-order change may be large and significant, that usually occurs within the existing framework of the organization and may leave the basic support systems and ways of thinking within the organization untouched. Transformational change fundamentally redefines what the organization is, or changes its basic framework. Implementing transformational change requires more skill, determination and effort than incremental change.
METHODS :Organizational Development to initiate incrementalchange : Diagnostic activities: Fact-finding activities designed to ascertain problems. Traditional data-collection methods -including interviews and questionnaires are commonly used. Team-building activities : Activities designed to enhance the effective operation of system teams. Intergroup activities: Activities designed to improve effectiveness of interdependent groups. The focus is on joint activities. Survey feedback activities: Analysing data produced by a survey and designing action-plans based on these data. Education and training activities: A wide range of possible activities designed to improve skill, abilities, and knowledge of individuals.
Structural activities: Activities designed to improve the effectiveness of the technical or structural aspects affecting individuals or groups. Examples include job enrichment, cooperation and conflict.• Process consultation activities: Activities on the part of the consultant that help manager understand and act on human processes in organizations, such as leadership, cooperation and conflict.• Grid organization development activities: Activities developed by Blake and Mouton, constituting a six- phase change model involving the entire organization.• Third-party peacemaking activities: Activities designed to manage conflict between two parties, and conducted by third party, usually a skilled consultant.• Coaching and Counseling activities: Activities that entail working with individuals to better enable them to define learning goals, learn how other see their behaviour, explore alternative bahaviours and learn new behaviours.
• Life and career planning activities: Activities that help individuals identify life and career objectives, capabilities, areas of strength and deficiency and strategies for achieving objectives• Planning and goal setting activities: Activities that include theory and experience in planning and goal setting. They may be conducted at the level of the individual group and organization.• Strategic management activities : Activities that help key policymakers identify their organizations basic missions and goals; ascertain environmental demands, threats and opportunities; and engage in long range action planning.
DEPTH OF CHANGE : COMBINING INCREMENTAL & TRANSFORMATIONAL CHANGE Incremental Transformational Change Change Type 1 Type 2Collaborative Participative Charismatic Styles Evolution Transformation Type 3 Type 4 Coercive Forced Dictatorial Styles Evolution Transformation STYLES OF CHANGE MANAGEMENT
PARTICIPATION EVOLUTION :Emphasizes incremental changes achieved by collaborative methods.It is most appropriate where only minor adjustments are needed i.e.first order change or where there is disparity between performanceand demand (out of sync), but time is available to change and keyinterest groups are in favour of this.CHARISMATIC TRANSFORMATION:Also emphasizes collaborative approaches but under differentcircumstances compared to participation evolution scenario. Here,time is not on the executive’s side and radical, or second-orderchange is needed because the organization is “not in sync” with theenvironment. Participation is possible because key employee’ssupport the need for radical change. This approach, however, alsorequires inspirational leadership at the top.
FORCED EVOLUTION:The methods needed to implement change in these circumstances aremore autocratic, top down, and in some cases, coercive. Thisapproach is necessary where change needs to occur, time is lesspressing, but key employee’s are opposed to change. This approachis appropriate in situations where the organization is characterized by,for instance, entrenched middle management or union groups whohave rejected participation and may have resorted to unresponsive oreven spoiling tactics.DIRECTORIAL TRANSFORMATION:Is necessary when the organization is “out of sync” there is no timefor extensive participation and no support within the organization forradical change, but such change is vital to organization survival andfulfillment of its basic mission. In this case, the methods to be usedhave to be radical in order to achieve the revitalization of theorganization.
IMPLEMENTING CHANGEHas two important sequences: • First Stage : RECOGNITION Stimulus: Initially there will be some kind of stimulus, such as a downturn in profits or the loss of key personnel, which will caus ethe executive to consider whether change is necessary. Reaction: A stimulus will usually give rise to some kind of reaction, however, it is unlikely that one’s initial response will give rise to anything deeper than first order change. Response: The four responses which are related to mindsets are Despair, Denial, Resistance or Consideration
• Second Stage : DEVELOPMENT & ACTION Development: To progress, people not only have to be prepared to consider new ways of operating, they must also discard old patterns of thinking and behaving before they genuinely try to adopt different approaches Full Transition: As the organization or individual begins to master most aspects of the situation they experience feelings of rising certainty and capability
Establishing maintenance systems and evaluating the change effort Having gone through a period of change, and in some cases quite traumatic change, it is but natural to feel exhausted or easy to become complacent. There is a real danger that having achieved a major organizational transformation, capability then gives way to complacency; exhilaration to fatigue; strategizing to habituation. This must be avoided and steps should be taken to evaluate the change effort and also to strengthen the employees so that complacency does not set in at any time.